What is the Purpose of Higher
Education?
Mark Schneider
President, College Measures
Vice President and Institute Fellow, AIR
February 17, 2014
Can You Self-Actualize While Living
in Your Mother’s Basement?
Purpose v. Value?
• Is it about money or broader outcomes?
• How to measure value (even if we restrict ourselves to labor market
outcomes):
– Institution vs. Program Level
– Time frame:
• Wage data: first year? 5 years? 10?
• Other data? Rolling averages?
• Comparisons
– Criterion based
– Norm based
– Individually driven
• Who should assess value?
– Government?
– Others (not for profits vs. for profit companies)?
Programs with Bachelor’s Graduates Having
Lowest and Highest First-Year Earnings, by States
State
Lowest First-Year Earnings
Highest First-Year Earnings
Arkansas
Music Performance
$19,808
Engineering
$56,655
Colorado
Dieticians
$24,876
Chemical Engineering
$90,099
Florida
Drama
$19,548
Fire Science
$69,756
Tennessee
Photography
$28,743
Systems Engineering
$54,346
$15,053
Petroleum
Engineering
$117,177
Petroleum
Engineering
$61,517
Texas
Virginia
Health Services
Philosophy
$20,442
• Common Theme in lowest first year earnings: Liberal Arts
• Common theme in highest first-year earnings: Engineering
Average Wages after Year 1 and after Year 10:
Graduates from Popular Bachelor’s Degree Programs in Texas
Time To
Degree
Area of Study
Wages Year 1
Wages Year 10
Years 1-10 growth
Biology, General
5.30
$23,243
$81,484
251%
Psychology, General
5.24
$23,729
$54,128
128%
Criminal Justice and Corrections
5.56
$28,184
$55,025
95%
Health and Physical Education/Fitness
5.64
$28,818
$58,109
102%
Marketing
5.05
$30,776
$78,133
154%
5.36
$31,016
$69,055
123%
5.48
$31,816
$70,911
123%
Multi-/Interdisciplinary Studies, Other
5.63
$32,133
$49,315
53%
Accounting and Related Services
5.70
$34,331
$76,236
122%
5.17
$34,392
$95,920
179%
5.57
$34,813
$80,176
130%
State wide university bachelors
average
Business Administration, Management
and Operations
Finance and Financial Management
Services
Management Information Systems and
Services
For most majors: start low, end low; start high, end high
Debt Servicing as Example of Why
Labor Market Outcomes Matter
• Criterion based:
– Rule of Thumb: Debt should not exceed first year
earnings
– At that level about 11% of gross first year earnings
will go to service debt at current 3.9% rate
Student Loans vs. Wages: Institution Level
Institution name
Prairie View A&M
University
The University of Texas at
Austin
loan
Year 1 Wages
Year 10 Wages
Monthly payment
Percent year 1
wages
$36,218
$35,890
$62,835
$365
12%
7%
$37,522
$38,713
$98,976
$378
12%
5%
Texas Tech University
$30,146
$31,937
$75,477
$304
11%
5%
Texas A&M UniversityCorpus Christi
$30,240
$32,489
$61,279
$305
11%
6%
$32,234
$35,230
$93,682
$325
11%
4%
$29,101
$31,904
$62,185
$293
11%
6%
$28,103
$35,456
$74,142
$283
10%
5%
$18,533
$30,042
$58,599
$187
7%
4%
$23,032
$37,563
$72,491
$232
7%
4%
$20,432
$33,794
$62,674
$206
7%
4%
$18,265
$32,908
$54,536
$184
7%
4%
$17,882
$35,275
$59,598
$180
6%
4%
Sul Ross State University
Rio Grande College
$13,012
$30,413
$45,901
$131
5%
3%
Texas A&M UniversityTexarkana
$13,241
$35,578
$67,714
$133
5%
2%
Texas A&M University
Texas A&M UniversityKingsville
Statewide Summary for
Universities
The University of Texas of
the Permian Basin
The University of Texas at
Arlington
The University of Texas at
El Paso
The University of Texas at
Brownsville
The University of TexasPan American
Percent year 10
wages
Norm Based
• Compare to Overall State Performance
Compared to Overall State Performance Level
Institution name
Prairie View A&M
University
The University of Texas at
Austin
loan
Year 1 Wages
Year 10 Wages
Monthly payment
Percent year 1
wages
$36,218
$35,890
$62,835
$365
12%
7%
$37,522
$38,713
$98,976
$378
12%
5%
Texas Tech University
$30,146
$31,937
$75,477
$304
11%
5%
Texas A&M UniversityCorpus Christi
$30,240
$32,489
$61,279
$305
11%
6%
$32,234
$35,230
$93,682
$325
11%
4%
$29,101
$31,904
$62,185
$293
11%
6%
$28,103
$35,456
$74,142
$283
10%
5%
$18,533
$30,042
$58,599
$187
7%
4%
$23,032
$37,563
$72,491
$232
7%
4%
$20,432
$33,794
$62,674
$206
7%
4%
$18,265
$32,908
$54,536
$184
7%
4%
$17,882
$35,275
$59,598
$180
6%
4%
Sul Ross State University
Rio Grande College
$13,012
$30,413
$45,901
$131
5%
3%
Texas A&M UniversityTexarkana
$13,241
$35,578
$67,714
$133
5%
2%
Texas A&M University
Texas A&M UniversityKingsville
Statewide Summary for
Universities
The University of Texas of
the Permian Basin
The University of Texas at
Arlington
The University of Texas at
El Paso
The University of Texas at
Brownsville
The University of TexasPan American
Percent year 10
wages
What about Time?
Disciplinary Focus: What a difference a decade makes
Area of study
Microbiological Sciences
and Immunology
Statistics
Medical Basic Sciences
Archeology
Germanic Languages,
Literatures, and
Linguistics
Biology, General
Classics and Classical
Languages, Literatures,
and Linguistics
Counseling Psychology
Communications
Technology/Technician
Philosophy
Anthropology
Health/Medical
Preparatory Programs
Political Science and
Government
loan
Wages Year 1
Wages Year 10
Monthly payment
percent first year
montly for debt
percent year 10
montly for debt
$61,818
$23,285
$74,482
$711
37%
11%
$52,808
$20,276
$78,845
$608
36%
9%
$63,546
$26,990
$217,651
$731
33%
4%
$55,028
$24,095
$61,956
$633
32%
12%
$42,156
$22,264
$55,862
$485
26%
10%
$43,770
$23,248
$75,911
$504
26%
8%
$44,186
$23,633
$50,916
$508
26%
12%
$45,280
$25,091
$42,719
$521
25%
15%
$38,544
$22,291
$90,800
$444
24%
6%
$38,692
$23,476
$54,900
$445
23%
10%
$32,295
$19,929
$44,198
$372
22%
10%
$45,486
$28,873
$105,567
$523
22%
6%
$35,888
$23,859
$63,214
$413
21%
8%
Institution is the wrong level of
analysis: Program level differences
Program Level: Anthropology
Institution name
loan
Year 1 Wages
Year 10 Wages
Percent of first
Monthly payment year wages
Percent of Year 10
Wages
Texas Tech University
$36,036
$12,438
$52,863
$363
35%
8%
The University of Texas at San
Antonio
$39,052
$13,804
$43,870
$394
34%
11%
The University of Texas at El
Paso
$30,025
$11,373
$31,592
$303
32%
11%
Texas A&M University
$41,312
$16,939
$38,315
$416
29%
13%
University of Houston-Clear
Lake
$52,332
$25,461
$50,675
$527
25%
12%
The University of Texas at
Austin
$38,561
$21,554
$51,201
$389
22%
9%
University of North Texas
$35,646
$21,043
$47,408
$359
20%
9%
Statewide for Universities
$33,136
$21,166
$46,328
$334
19%
9%
Texas State University
$28,483
$23,196
$44,312
$287
15%
8%
The University of Texas at
Arlington
$22,660
$28,999
$38,689
$228
9%
7%
University of Houston
$20,595
$26,397
$52,953
$208
9%
5%
The University of Texas-Pan
American
$10,542
$18,014
$34,298
$106
7%
4%
Anthropology vs. Economics
Institution name
Statewide
Summary for
Universities
The University of
Texas at Austin
Texas Tech
University
The University of
Texas at Dallas
The University of
Texas at
Arlington
Statewide
Summary for
Universities
University of
North Texas
Texas A&M
University
Texas A&M
UniversityCommerce
University of
Houston
The University of
Texas-Pan
American
Area of Study
loan
Year 1 Wages
Year 10 Wages
Monthly
payment
Percent of first
year wages
Percent of Year
10 Wages
Anthropology
$33,136
$21,166
$46,328
$334
19%
9%
Economics
$38,914
$33,437
$110,406
$392
14%
4%
Economics
$30,725
$26,461
$96,431
$310
14%
4%
Economics
$35,553
$34,489
$72,557
$358
12%
6%
Economics
$30,431
$30,762
$68,591
$307
12%
5%
Economics
$27,035
$31,016
$69,055
$272
11%
5%
Economics
$26,367
$30,411
$72,285
$266
10%
4%
Economics
$22,523
$30,525
$112,496
$227
9%
2%
Economics
$22,786
$31,547
$93,437
$230
9%
3%
Economics
$25,394
$39,033
$84,796
$256
8%
4%
Economics
$11,303
$51,348
$46,507
$114
3%
3%
Individual “Ratings”
Individual Weighting?
What is the Role of Intermediaries?
Government Role in Assessing the
Value of Higher Education
• Federal Government vs. State
• Accountability vs. Consumer Choice